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Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels

Management

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Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period:

1

Factory depreciation

$29,168.00

2

Indirect labor

72,920.00

3

Factory electricity

7,292.00

4

Indirect materials

26,220.00

5

Selling expenses

27,000.00

6

Administrative expenses

19,700.00

7

Total costs

$182,300.00

Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case:

Budgeted Volume (Cases) Processing Hours per Case

Tortilla chips 3,900 0.18

Potato chips 5,100 0.12

Pretzels 2,200 0.43

Total 11,200

Required:

a. Determine the single plantwide factory overhead rate.*

b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.*

* If required, round your answers to the nearest cent.

 

 

Amount Descriptions

Potato chips

Pretzels

Setup

Quality control

Tortilla chips

Total

 

 

Question:

First calculate:

Budgeted production volume for each product x Processing hours. Add together to obtain total processing hours.

Recall that factory overhead does not include selling and administrative expenses. Divide the total of overhead costs by total processing hours to obtain the overhead rate.

b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. If required, round your answer to the nearest cent.

 

Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. If required, round your answer to the nearest cent.

Question not attempted.

Score: 0/49

 

 

1 Total Factory Overhead Per Case Factory Overhead

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